Community Foundation to invest $2 million in local projects

Kate Carlsonkcarlson@mdn.net

Updated
9:10 am EDT, Friday, June 1, 2018

Sharon Mortensen, CEO and president of the Midland Area Community Foundation, announces May 30 that the foundation is investing in the Fairfield Inn & Suites hotel being constructed in downtown Midland. (File Photo) less

Sharon Mortensen, CEO and president of the Midland Area Community Foundation, announces May 30 that the foundation is investing in the Fairfield Inn & Suites hotel being constructed in downtown Midland. (File ... more

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Sharon Mortensen, CEO and president of the Midland Area Community Foundation, announces May 30 that the foundation is investing in the Fairfield Inn & Suites hotel being constructed in downtown Midland. (File Photo) less

Sharon Mortensen, CEO and president of the Midland Area Community Foundation, announces May 30 that the foundation is investing in the Fairfield Inn & Suites hotel being constructed in downtown Midland. (File ... more

Community Foundation to invest $2 million in local projects

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The first impact investment to the tune of $300,000 was made by the Midland Area Community Foundation to the Fairfield Inn & Suites hotel, which is being constructed in downtown Midland.

The $300,000 comes from a new fund set up by the foundation using 2 percent of its assets, about $2 million, that will be invested in local, mostly for-profit businesses. Community members from the area can come to the foundation with ideas for how dollars from the new fund should be invested or make a donation to the fund if they are interested, said Sharon Mortensen, Midland Area Community Foundation president and CEO.

"Really, it's a new tool taking dollars we already have that we already would be investing, and putting them here," Mortensen said.

Like most foundations, the Midland Area Community Foundation invests in a diverse portfolio to make its charity contributions possible, Mortensen said. Using 2 percent of its assets for impact investing on the local level adds another layer to the portfolio of community foundation investments.

The impact investing fund uses dollars that are not designated for certain purposes and will not take away from grants or other charitable funds within the foundation, Mortensen assured.

"This is different than grants," Mortensen said. "This is investment. But we will keep doing grants just like we always do, and we will continue to generously support them with all the resources we have available."

The hotel was selected as a worthy candidate for impact investment because it will likely result in financial and social returns in the form of job creation and commerce downtown, Mortensen explained. Not all impact investment projects will necessarily have a large financial return, she said, but must align with the foundation's vision and provide some kind of social return to the community.

"Sometimes when you do an impact investment in your community, while you're goal is to get financial returns too, you're bigger goal is social returns to benefit your community," Mortensen said. "I'm looking forward to seeing what ideas people have, what ideas start to develop and where we can be a partner and investor in ways that are meaningful to our community."

There is no specific timeline for when future money from the impact investment fund will be allocated to a local project, Mortensen said, it really just depends on the ideas brought to the foundation. The cap on the amount of investment a single project can gain from the fund is 25 percent, or about half a million dollars from the impact investment fund.

"In most cases, we would not be the sole investor in a project," Mortensen said. "Like with the hotel, we're a small investor in it, but many times what our dollar will do is to help ensure local involvement, fill gaps in financing, and in most cases we'll be part of a group of people willing to invest."

An impact investment committee made up of community foundation board members, city and county officials, developers, bankers helps determine what local projects should be considered for impact investment before it is approved by the foundation's board of directors.

"Right now we're meeting and discussing other possibilities and open to community input for potential projects," said Carol Miller, chair of the impact investing committee within the foundation.

The committee is a "great blend representing different aspects of the community," Miller said.

"I've been very pleased with the engagement of the committee," Miller said. "We've worked hard to do this right."